Could David slay Goliath without his sling? Of course not, but a modern-day David with a big technological rock is hoping the Federal Communications Commission will soon grant him that sling in the form of radio spectrum to compete against several Goliaths in the emerging mobile satellite systems arena.

“Celsat’s system will allow extraordinarily low-cost communications from
Bangor, Maine, to a boat in Puget Sound, to an airplane over the Mojave
Desert, to a wheat field in Kansas,” said David D. Otten, Chief Executive
Officer of Celsat. “Celsat can provide communications anywhere to anywhere on
the cheap.”

However, Celsat must first be allocated a license for spectrum by the FCC.
But the mobile satellite field is quite crowded and the existing Goliaths want
everything. Six other applicants for newly allocated spectrum already have
ample and unused spectrum, but want more. And more. And more.

“According to the FCC public notice, six applicants — including Iridium
and Globalstar — have each asked for all of the available new spectrum, even
though they all have allocated and unused spectrum,” explains David D. Otten,
Chief Executive Officer of Celsat. “They have asked for this new spectrum, in
my opinion, without offering a sufficient explanation for why they require
such a large allocation. Indeed, what each has asked for is a tenfold
increase over their current licenses.

“Most of these applicants have yet to even commence service,” Otten added,
“yet granting their requests could impound this spectrum for one or more
decades making it unavailable to new entrants and to new competition. From
these actions,” said Otten, “one could infer that an effort is being made to
stifle cost cutting competition.”

Otten, an industry veteran with more than 30 years in the business, is a
former top executive at TRW, instrumental in that company’s efforts in
satellite communications. Celsat has filed comments today with the FCC
opposing the allocation of any new spectrum to those applicants who already
have licenses.

Celsat plans to deploy a patented satellite based mobile communications
system that is compatible with and augments terrestrial PCS systems now being
implemented throughout the United States. The launch of a single
geostationary satellite will inaugurate these services.

Pennies to the dollar

Celsat has proposed a technologically advanced and patented system that
experts including major telecommunications companies believe will provide high
quality and low cost mobile satellite service. Celsat’s system would
initially permit operation anywhere in the continental U.S. as well as a
significant portion of Canada and Mexico. It would also provide high-quality
communications with half the power of current licensees and would allow
consumers to use a small and slim pocket sized cellular phone. Celsat
believes the other companies require bulky and heavy handsets, with large and
awkward antennae and which require relatively high radiation to make a phone
call.

But Celsat’s true appeal, according to Otten, may be its expected cost of
operation to consumers. Using a system of earth stations and a stationary
satellite, Celsat would be able to carry voice, data, internet, and paging, as
well as determine the position of the user for pennies per minute.

“By contrast, existing licensees have stated that they will have costs in
the range of dollars per minute,” Otten said. “Such a cost is well out of the
range of most consumers. Our service is much more economical and consumer
friendly.”

Major operators support Celsat

Members of the GSM Alliance, a consortium of leading U.S. and Canadian PCS
carriers, are supporting Celsat before the FCC. Celsat’s pricing and
innovative technology, which works very well with Global System for Mobile
(GSM) communications technology, attracted the Alliance’s attention. Celsat
is the only mobile satellite company that can operate with the smallest GSM
handsets.

Celsat’s patented technology is particularly compatible with GSM, the
world’s most popular wireless technology. More than 80 million people around
the world use GSM in more than 100 countries. In fact, GSM adds another 2
million new customers around the world every month.

“Celsat has the potential to provide Alliance members with instant
national coverage,” explained Don Warkentin, President and Chief Executive
Officer of Aerial Communications, Inc., and chairman of the GSM Alliance.
“Members of the Alliance will be able to offer the most complete coverage of
North America available anywhere — at low PCS prices.”

“We trust that the FCC will give Celsat a chance to compete,” Warkentin
said, “and allow us to provide customers with true continental coverage and
mobility. This would be consistent with the agency’s policy of enabling new
applicants to bring innovative and effective technology to the marketplace.
Such an open and level arena ensures that consumers are being served in the
most efficient and cost effective manner.”

Trusting in competition

“We believe the FCC, in continuing its policy of fostering competition,
will conclude that those entrants who have no spectrum at this time should be
allocated space on the basis of their ability to offer vibrant, new technology
and low cost competition,” Otten said.

“Such spectrum allocation should be conditioned on the new entrants ‘using
it or losing it’ within a reasonable period of time,” Otten said. “Spectrum
should be allocated without auction to new competitors that offer these
qualities. The process should favor no competitor over the other, and should
reduce the barriers to entry for those technologically advanced operators
currently without spectrum.”

The GSM Alliance, L.L.C. is a consortium of U.S. and Canadian digital
wireless PCS carriers, which helps provide seamless wireless communications
for their customers, whether at home, in more than 1,000 U.S. and Canadian
cities and towns, or abroad. Using Global Systems for Mobile (GSM)
communications, GSM companies provide superior voice clarity, unparalleled
security and leading-edge wireless voice, data and fax features for customers. Current members of the GSM Alliance now include: Aerial Communications, Inc., BellSouth Mobility DCS, Cook-Inlet Western Wireless; Microcell Telecommunications Inc., Omnipoint Communications, LLC, Pacific Bell Mobile Services, Powertel, Inc., and Western Wireless, Corp., which continue to operate their own businesses and market under their own names.